If you have already prepared your will, congratulations—too few Americans have taken this key first step in the estate planning process. In fact, only 33% of Americans have created their will, according to Caring.com’s 2022 Wills and Estate Planning Study.
Yet, while having a will is important—and all adults over age 18 should have this document in place—for all but a few people, creating a will is just one small part of an effective estate plan that works to keep your loved ones out of court and out of conflict. With this in mind, here we look at exactly what having a will in place will—and will not—do for you and your loved ones in terms of estate planning.
If you have yet to create your will, or you haven’t reviewed your existing will recently, contact us, your Legacy Law Group to get this vital first step in your estate planning handled right away.
What A Will Does
A will is a legal document that outlines your final wishes in regards to how your assets are distributed to your surviving family members. Here are some of the things having a will in place allows you to do:
1. Choose how assets are divided upon your death: A will’s primary purpose is to allow you to designate how you want your assets divided among your surviving loved ones upon your death. If you die without a will, state law governs how your assets are distributed, which may or may not be in line with your wishes.
However, as we’ll discuss more below, a will only allows you to provide for the distribution of certain types of assets—namely, a will only covers assets owned solely in your name. Other types of assets, such as those with a beneficiary designation and assets co-owned by you with others, are not affected by your will.
2. Name an executor: In your will, you can name the person, or persons, you want to serve as your executor, sometimes called a “personal representative.” Following your death, your executor is responsible for wrapping up your final affairs. This includes numerous responsibilities, including filing your will with the local probate court, locating and managing all of your assets, paying off any debts you have outstanding, filing and paying your final income taxes, and finally, distributing your remaining assets to your named beneficiaries.
3. Name guardians for your minor children: If you are the parent of minor children, it is possible to name legal guardians for them in your will. However, naming guardians for your children in your will alone is seriously risky, and doing so may even leave your kids vulnerable to being taken into the care of strangers if something happens to you. And this is true even if you’ve worked with another lawyer to create your will, because most lawyers haven’t studied and been trained on what’s necessary for ensuring the well-being and care of minor children.
4. Serve as a backup for a living trust: Because it can be difficult to transfer the legal title to every single one of your assets into a revocable living trust before your death, most trusts are combined with what’s known as a “pour-over” will. This type of will serves as a backup to a living trust, so all assets not held by the trust upon your death are transferred, or “poured,” into your trust through the probate process.
A Small—But Important—First Step
As you can see here, having a will in place only gives you a limited amount of power over the distribution of certain assets, but that doesn’t mean you should go without one. Without a will, you would have no say in who inherits your assets when you die, and everything you own could even go to the state.
But worse than that, your surviving loved ones will be the ones who have to clean up the mess you’ve left behind. And they will have to handle all of this while grieving your death. Instead, you should see your will as an important first step in the estate planning process—one that works best when integrated with a variety of other legal vehicles, such as trusts, powers of attorney, and advance healthcare directives.
Next week, in part two, we’ll detail all of the things that your will does not do, and then we’ll outline the different estate planning tools that you should have in place to make up for these potential blind spots in your estate plan. Until then, if you need to get your estate planning started or you would like us to review your existing estate plan (even one created by another lawyer) to see if you are missing anything, contact us, your Trusted Advisors at Legacy Law Group.